RELATED QUESTIONS

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  1. The demand for personal computers can be characterized by the following point elasticities: price elasticity = 5, cross-price elasticity with software = 4, and income elasticity = 2.5. Indicate whether each of the following statements is true or false, and explain your answer. A. A price reduction for personal computers will increase both the number of units demanded and the total revenue of sellers. B. The cross-price elasticity indicates that a 5% reduction in the price of personal computers will cause a 20% increase in software demand. C. Demand for personal computers is price elastic and computers are cyclical normal goods. D. Falling software prices will increase revenues received by sellers of both computers and software. E. A 2% price reduction would be necessary to overcome the effects of a 1% decline in income.
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  It was vacation time, and so I decided to visit my cousin's home. What a grand time we had! In the mornings, we both would go for a jog. The evenings were spent on the tennis court. Tiring as these activities were, we could manage only one per day, i.e., either we went for a jog or played tennis each day. There were days when we felt lazy and stayed home all day long. Now, there were 16 mornings when we did nothing, 15 evenings when we stayed at home, and a total of 13 days when we jogged or played tennis. For how many days did I stay at my cousin's place?